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Sam Instone

By: Sam Instone

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May 28th, 2018

Why evidence-based investing and academic evidence are the same thing

Investment | Financial Education

Some financial professionals are dismissive of academic research.

They argue that it’s too far removed from the realities of today’s financial markets.

True, academic models are, by their nature, theoretical.

But that doesn’t mean investors can’t learn practical lessons from them.

Last week I spoke about Dimensional Fund Advisors.

Amongst its founders, is a Nobel Prize-winner.

3 others also have very close associations with the firm.

Ever wondered where most insights surrounding lifecycle finance or how to structure portfolios come from?

Nobel Prize-winners.

And then there is the most famous contribution that academics have made to our understanding of the financial markets…

Investors need to learn from academia and its models of the world.

So that when they come to the real world, they’re better equipped and have better frameworks to make rational investment decisions.

Dimensional is possibly unique among asset managers in that everything it does is based on empirical evidence.

Over the years, the firm has worked with some of the most famous names in academic finance.

I’ve just invested a significant sum with them.

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About Sam Instone

Sam Instone, Director at AES International, is passionate about positive change and ensuring international investors get better results.

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